German Chancellor Ms Angela Merkel, who has sought to bolster ties with the United States since she took office, rebuked Washington on Saturday for sanctioning secret CIA prisons used to interrogate terror suspects.
"The use of such prisons is not compatible with my understanding of the rule of law," Ms Merkel said in Berlin.
President Bush admitted this week the CIA had run detention centers at secret overseas locations, months after reports surfaced that the intelligence agency had used Europe as a hub to shuttle suspects around for interrogation.
Ms Merkel said even in the fight against terrorism, such means did not justify the ends and that other solutions must be found.
"(Instead) we must find answers to how we can combat terrorists effectively without calling our fundamental principles and beliefs in question," she said.
At the end of last year, US Secretary of State Ms Condoleezza Rice came to Europe and defended Washington's treatment of its detainees in the war on terrorism, but did not address the issue of whether the CIA had operated secret prisons.
Since taking power in November, Ms Merkel has been at pains to repair ties with the US that were damaged by her predecessor Gerhard Schroeder's vocal opposition to the invasion of Iraq.
Despite her criticism, Ms Merkel said she welcomed the fact that Mr Bush had raised the issue of the prisons himself.
Germany's Interior Minister Mr Wolfgang Schaeuble also condemned the detentions, telling the Passauer Neue Presse daily that the United States had gone too far.
"I've never seen a reason for interning terror suspects -- like in Guantanamo -- outside the jurisdiction of American courts," he told the paper, adding that he had no information that the CIA had operated secret prisons in Germany.
Mr Bush's public admission on Wednesday prompted renewed calls by European lawmakers that their governments divulge the locations of the secret CIA prisons.